BILL NUMBER: SB 1279	CHAPTERED  10/10/99

	CHAPTER   971
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 10, 1999
	PASSED THE SENATE   SEPTEMBER 10, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 8, 1999
	AMENDED IN ASSEMBLY   SEPTEMBER 3, 1999
	AMENDED IN ASSEMBLY   JULY 8, 1999

INTRODUCED BY   Senator Polanco
   (Coauthor: Assembly Member Ducheny)

                        FEBRUARY 26, 1999

   An act to amend Sections 1156, 3562, 3566, 3579, 20394, 20636, and
22810.5 of the Government Code, relating to higher education labor
relations.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1279, Polanco.  Higher education labor relations:  definition
of "employee."
   Existing law contains provisions relating to employer-employee
relations between the State of California and the employees of state
institutions of higher education.  For the purposes of these
employer-employee relations, "employee" or "higher education employee"
is defined as any employee of the Regents of the University of
California, the Directors of the Hastings College of the Law, or the
Trustees of the California State University whose employment is
principally within the State of California.
   This bill would delete the requirement that the employment of an
"employee" or "higher education employee" be principally within the
State of California, but would exclude employees whose principal
place of employment is outside the State of California at a worksite
with 100 or fewer employees. The bill would provide that an
organization that represents one or more employees whose principal
worksite is outside the State of California is required to file a
statement, as prescribed, submitting to the jurisdiction of the
Public Employment Relations Board, before it could act as an employee
organization.  The bill would also make several technical,
nonsubstantive, and conforming changes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1156 of the Government Code is amended to read:

   1156.  (a) Any eligible employee who is participating in a
flexible benefits program may elect to receive one or more benefits
that qualify to be excluded from gross income in lieu of a portion of
his or her salary.
   (b) For purposes of this section, an "eligible employee" means any
of the following:
   (1) An employee excluded from the definition of "state employee"
in Section 3513.
   (2) A "managerial employee" as defined in Section 3513.
   (3) A "confidential employee" as defined in Section 3513 and
Section 3562.
   (4) A "supervisory employee" as defined in Section 3580.3.
   (5) An officer or employee of the State of California in the
executive or judicial branch of government who is not a state civil
service employee pursuant to Part 2 (commencing with Section 18500)
of Division 5 of Title 2.
   (6) A "state employee," as defined by Section 3513 or employed by
the state as provided for in Article VI of the Constitution.
   (c) Any eligible employee participating in the flexible benefits
program shall be subject to federal laws and implementing regulations
of the Department of Personnel Administration which affects the
flexible benefit program throughout the period of the employee's
enrollment.
   (d) Unless the trustee or the administrator of the state's
flexible benefit program is the Controller or another state officer,
that program shall be administered in compliance with the federal
Employee Retirement Income Security Act of 1974 (ERISA:  29 U.S.C.
Sec. 1001 et seq.).
   (e) As a condition of participating in a flexible benefits
program, each eligible employee shall provide evidence, in a manner
satisfactory to the Department of Personnel Administration, that the
employee is covered by a basic health benefits plan, and his or her
agreement to remain covered for the period of participation in the
flexible benefits plan.
   (f) There is in the State Treasury the Flexelect Benefit Fund
which, notwithstanding Section 13340, is continuously appropriated
without regard to fiscal years to the Department of Personnel
Administration for expenditure to implement the flexible benefits
program and to pay the related administrative costs.  The fund shall
consist of the amounts received from state employee compensation
excluded from gross income and transmitted to the Flexelect Benefit
Fund, income of whatever nature earned on the money in the Flexelect
Benefit Fund during any fiscal year and credited to the fund, and
amounts appropriated therefor in the annual Budget Act and other
statutes.
   (g) On or after July 1, 1990, any funds remaining in the State
Employees' Dependent Care Assistance and Health Care Assistance Fund
shall be transmitted into the account in the Flexelect Benefit Fund
for the administrative expenses of the Controller's office to pay the
related administrative costs.
  SEC. 2.  Section 3562 of the Government Code is amended to read:
   3562.  As used in this chapter:
   (a) "Arbitration" means a method of resolving a rights dispute
under which the parties to a controversy must accept the award of a
third party.
   (b) "Board" means the Public Employment Relations Board
established pursuant to Section 3513.
   (c) "Certified organization" means an employee organization which
has been certified by the board as the exclusive representative of
the employees in an appropriate unit after a proceeding under Article
5 (commencing with Section 3573).
   (d) "Confidential employee" means any employee who is required to
develop or present management positions with respect to meeting and
conferring or whose duties normally require access to confidential
information which contributes significantly to the development of
those management positions.
   (e) "Employee" or "higher education employee" means any employee
of the Regents of the University of California, the Directors of
Hastings College of the Law, or the Trustees of the California State
University.  However, managerial and confidential employees and
employees whose principal place of employment is outside the State of
California at a worksite with 100 or fewer employees shall be
excluded from coverage under this chapter.  The board may find
student employees whose employment is contingent on their status as
students are employees only if the services they provide are
unrelated to their educational objectives, or, that those educational
objectives are subordinate to the services they perform and that
coverage under this chapter would further the purposes of this
chapter.
   (f) (1) "Employee organization" means any organization of any kind
in which higher education employees participate and which exists for
the purpose, in whole or in part, of dealing with higher education
employers concerning grievances, labor disputes, wages, hours, and
other terms and conditions of employment of employees.  An
organization that represents one or more employees whose principal
worksite is located outside the State of California is an employee
organization only if it has filed with the board and with the
employer a statement agreeing, in consideration of obtaining the
benefits of status as an employee organization pursuant to this
chapter, to submit to the jurisdiction of the board.  The board shall
promulgate the form of the statement.
   (2) "Employee organization" shall also include any person that an
employee organization authorizes to act on its behalf. An academic
senate, or other similar academic bodies, or divisions thereof, shall
not be considered employee organizations for the purposes of this
chapter.
   (g) "Employer" or "higher education employer" means the regents in
the case of the University of California, the Directors in the case
of Hastings College of the Law, and the trustees in the case of the
California State University, including any person acting as an agent
of an employer.
   (h) "Employer representative" means any person or persons
authorized to act in behalf of the employer.
   (i) "Exclusive representative" means any recognized or certified
employee organization or person it authorizes to act on its behalf.
   (j) "Impasse" means that the parties have reached a point in
meeting and conferring at which their differences in positions are
such that further meetings would be futile.
   (k) "Managerial employee" means any employee having significant
responsibilities for formulating or administering policies and
programs. No employee or group of employees shall be deemed to be
managerial employees solely because the employee or group of
employees participates in decisions with respect to courses,
curriculum, personnel and other matters of educational policy. A
department chair or head of a similar academic unit or program who
performs the foregoing duties primarily on behalf of the members of
the academic unit or program shall not be deemed a managerial
employee solely because of those duties.
   (l) "Mediation" means the efforts of a third person, or persons,
functioning as intermediaries, to assist the parties in reaching a
voluntary resolution to an impasse.
   (m) "Meet and confer" means the performance of the mutual
obligation of the higher education employer and the exclusive
representative of its employees to meet at reasonable times and to
confer in good faith with respect to matters within the scope of
representation and to endeavor to reach agreement on matters within
the scope of representation.  The process shall include adequate time
for the resolution of impasses.  If agreement is reached between
representatives of the higher education employer and the exclusive
representative, they shall jointly prepare a written memorandum of
the understanding, which shall be presented to the higher education
employer for concurrence.  However, these obligations shall not
compel either party to agree to any proposal or require the making of
a concession.
   (n) "Person" means one or more individuals, organizations,
associations, corporations, boards, committees, commissions,
agencies, or their representatives.
   (o) "Professional employee" means:
   (1) Any employee engaged in work: (A) predominantly intellectual
and varied in character as opposed to routine mental, manual,
mechanical, or physical work; (B) involving the consistent exercise
of discretion and judgment in its performance; (C) of a character so
that the output produced or the result accomplished cannot be
standardized in relation to a given period of time; and (D) requiring
knowledge of an advanced type in a field of science or learning
customarily acquired by a prolonged course of specialized
intellectual instruction and study in an institution of higher
learning or a hospital, as distinguished from a general academic
education or from an apprenticeship or from training in the
performance of routine mental, manual, or physical processes.
   (2) Any employee who: (A) has completed the courses of specialized
intellectual instruction and study described in subparagraph (D) of
paragraph (1), and (B) is performing related work under the
supervision of a professional person to qualify himself or herself to
become a professional employee as defined in paragraph (1).
   (p) "Recognized organization" means an employee organization which
has been recognized by an employer as the exclusive representative
of the employees in an appropriate unit pursuant to Article 5
(commencing with Section 3573).
   (q) (1) For purposes of the University of California only, "scope
of representation" means, and is limited to, wages, hours of
employment, and other terms and conditions of employment.  The scope
of representation shall not include any of the following:
   (A) Consideration of the merits, necessity, or organization of any
service, activity, or program established by law or resolution of
the regents or the directors, except for the terms and conditions of
employment of employees who may be affected thereby.
   (B) The amount of any fees which are not a term or condition of
employment.
   (C) Admission requirements for students, conditions for the award
of certificates and degrees to students, and the content and
supervision of courses, curricula, and research programs, as those
terms are intended by the standing orders of the regents or the
directors.
   (D) Procedures and policies to be used for the appointment,
promotion, and tenure of members of the academic senate, the
procedures to be used for the evaluation of the members of the
academic senate, and the procedures for processing grievances of
members of the academic senate.  The exclusive representative of
members of the academic senate shall have the right to consult and be
consulted on matters excluded from the scope of representation
pursuant to this subparagraph.  If the academic senate determines
that any matter in this subparagraph should be within the scope of
representation, or if any matter in this subparagraph is withdrawn
from the responsibility of the academic senate, the matter shall be
within the scope of representation.
   (2) All matters not within the scope of representation are
reserved to the employer and may not be subject to meeting and
conferring, provided that nothing herein may be construed to limit
the right of the employer to consult with any employees or employee
organization on any matter outside the scope of representation.
   (r) (1) For purposes of the California State University only,
"scope of representation" means, and is limited to, wages, hours of
employment, and other terms and conditions of employment.  The scope
of representation shall not include:
   (A) Consideration of the merits, necessity, or organization of any
service, activity, or program established by statute or regulations
adopted by the trustees, except for the terms and conditions of
employment of employees who may be affected thereby.
   (B) The amount of any student fees which are not a term or
condition of employment.
   (C) Admission requirements for students, conditions for the award
of certificates and degrees to students, and the content and conduct
of courses, curricula, and research programs.
   (D) Criteria and standards to be used for the appointment,
promotion, evaluation, and tenure of academic employees, which shall
be the joint responsibility of the academic senate and the trustees.
The exclusive representative shall have the right to consult and be
consulted on matters excluded from the scope of representation
pursuant to this subparagraph.  If the trustees withdraw any matter
in this subparagraph from the responsibility of the academic senate,
the matter shall be within the scope of representation.
   (E) The amount of rental rates for housing charged to California
State University employees.
   (2) All matters not within the scope of representation are
reserved to the employer and may not be subject to meeting and
conferring, provided that nothing herein may be construed to limit
the right of the employer to consult with any employees or employee
organization on any matter outside the scope of representation.
  SEC. 3.  Section 3566 of the Government Code is amended to read:
   3566.  The Trustees of the California State University shall adopt
reasonable rules and regulations for all of the following:
   (a) Registering employee organizations, as defined in Section
3562, and bona fide associations, as defined in Section 1150.
   (b) Determining the status of organizations and associations as
employee organizations or bona fide associations.
   (c) Identifying the officers and representatives who officially
represent employee organizations and bona fide associations.
  SEC. 4.  Section 3579 of the Government Code is amended to read:
   3579.  (a) In each case where the appropriateness of a unit is an
issue, in determining an appropriate unit, the board shall take into
consideration all of the following criteria:
   (1) The internal and occupational community of interest among the
employees, including, but not limited to, the extent to which they
perform functionally related services or work toward established
common goals, the history of employee representation with the
employer, the extent to which the employees belong to the same
employee organization, the extent to which the employees have common
skills, working conditions, job duties, or similar educational or
training requirements, and the extent to which the employees have
common supervision.
   (2) The effect that the projected unit will have on the meet and
confer relationships, emphasizing the availability and authority of
employer representatives to deal effectively with employee
organizations representing the unit, and taking into account factors
such as work location, the numerical size of the unit, the
relationship of the unit to organizational patterns of the higher
education employer, and the effect on the existing classification
structure or existing classification schematic of dividing a single
class or single classification schematic among two or more units.
   (3) The effect of the proposed unit on efficient operations of the
employer and the compatibility of the unit with the responsibility
of the higher education employer and its employees to serve students
and the public.
   (4) The number of employees and classifications in a proposed
unit, and its effect on the operations of the employer, on the
objectives of providing the employees the right to effective
representation, and on the meet and confer relationship.
   (5) The impact on the meet and confer relationship created by
fragmentation of employee groups or any proliferation of units among
the employees of the employer.
   (b) There shall be a presumption that professional employees and
nonprofessional employees shall not be included in the same
representation unit.  However, the presumption shall be rebuttable,
depending upon what the evidence pertinent to the criteria set forth
in subdivision (a) establishes.
   (c) There shall be a presumption that all employees within an
occupational group or groups located principally within the State of
California shall be included within a single representation unit.
However, the presumption shall be rebutted if there is a
preponderance of evidence that a single representation unit is
inconsistent with the criteria set forth in subdivision (a) or with
the purposes of this chapter.
   (d) Notwithstanding the foregoing provisions of this section, or
any other provision of law, an appropriate group of skilled crafts
employees shall have the right to be a single, separate unit of
representation.  Skilled crafts employees shall include, but not
necessarily be limited to, employment categories such as carpenters,
plumbers, electricians, painters, and operating engineers.  The
single unit of representation shall include not less than all skilled
crafts employees at a campus or at a Lawrence Laboratory.
   (e) Notwithstanding the foregoing provisions of this section, the
only appropriate representation units including members of the
academic senate of the University of California shall be either a
single statewide unit consisting of all eligible members of the
senate, or divisional units consisting of all eligible members of a
division of the senate.  In addition to the limitations of
subdivision (q) of Section 3562, the scope of representation of any
divisional unit shall be limited to those matters which have
customarily been determined on a division basis, but the employer
shall consult with the exclusive representative of a division on
matters which would be within the scope of representation or
consultation of a statewide representative.  When 35 percent of the
eligible members of the academic senate are represented by an
exclusive representative or representatives in divisional units, the
board, on petition of a representative or of an organization
comprised of those representatives, shall conduct an election to
determine if the eligible members of the entire senate wish
thereafter to be represented by a representative or organization in a
single unit on all matters within the scope of representation.  Any
other exclusive representative or organization of representatives or
any employee organization meeting the requirements of subdivision (a)
of Section 3577 shall be entitled, on petition, to appear on the
ballot, and in the event no choice receives a majority of the votes
cast, the runoff provisions of subdivision (a) of Section 3577 shall
be applicable.
   (f) The board shall not determine that any unit is appropriate if
it includes, together with other employees, employees who are defined
as peace officers pursuant to subdivisions (b) and (c) of Section
830.2 of the Penal Code.
  SEC. 5.  Section 20394 of the Government Code is amended to read:
   20394.  "State peace officer/firefighter member" also includes the
employees of a California State University police department,
established pursuant to Section 89560 of the Education Code, who have
been designated as peace officers as defined in Section 830.2 of the
Penal Code, and who are (a) members represented by Public Safety
Unit No. 8, or (b) members excluded from the definition of employee
in Section 3562 or are supervisory employees as defined in Section
3580.3, provided that these employees have responsibility for the
direct supervision of the state peace officer/firefighter members
represented in Public Safety Unit No. 8.  The Trustees of the
California State University shall notify this system when employees
meet these conditions and whenever a state peace officer/firefighter
member ceases to meet the conditions.
  SEC. 6.  Section 20636 of the Government Code is amended to read:
   20636.  (a) "Compensation earnable" by a member means the payrate
and special compensation of the member, as defined by subdivisions
(b), (c), and (g), and as limited by Section 21752.5.
   (b) (1) "Payrate" means the normal monthly rate of pay or base pay
of the member paid in cash to similarly situated members of the same
group or class of employment for services rendered on a full-time
basis during normal working hours.  "Payrate," for a member who is
not in a group or class, means the monthly rate of pay or base pay of
the member, paid in cash and pursuant to publicly available pay
schedules, for services rendered on a full-time basis during normal
working hours, subject to the limitations of paragraph (2) of
subdivision (e).
   (2) The computation for any leave without pay of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence.
   (3) The computation for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in state service.
   (c) (1) Special compensation of a member includes any payment
received for special skills, knowledge, abilities, work assignment,
workdays or hours, or other work conditions.
   (2) Special compensation shall be limited to that which is
received by a member pursuant to a labor policy or agreement or as
otherwise required by state or federal law, to similarly situated
members of a group or class of employment that is in addition to
payrate.  If an individual is not part of a group or class, special
compensation shall be limited to that which the board determines is
received by similarly situated members in the closest related group
or class that is in addition to payrate, subject to the limitations
of paragraph (2) of subdivision (e).
   (3) Special compensation shall be for services rendered during
normal working hours and, when reported to the board, the employer
shall identify the pay period in which the special compensation was
earned.
   (4) Special compensation may include the full monetary value of
normal contributions paid to the board by the employer, on behalf of
the member and pursuant to Section 20691, provided that the employer'
s labor policy or agreement specifically provides for the inclusion
of the normal contribution payment in compensation earnable.
   (5) The monetary value of any service or noncash advantage
furnished by the employer to the member, except as expressly and
specifically provided in this part, shall not be special compensation
unless regulations promulgated by the board specifically determine
that value to be "special compensation."
   (6) The board shall promulgate regulations that delineate more
specifically and exclusively what constitutes "special compensation"
as used in this section.  A uniform allowance, the monetary value of
employer-provided uniforms, holiday pay, and premium pay for hours
worked within the normally scheduled or regular working hours that
are in excess of the statutory maximum workweek or work period
applicable to the employee under Section 201 et seq. of Title 29 of
the United States Code shall be included as special compensation and
appropriately defined in those regulations.
   (7) Special compensation does not include any of the following:
   (A) Final settlement pay.
   (B) Payments made for additional services rendered outside of
normal working hours, whether paid in lump sum or otherwise.
   (C) Any other payments the board has not affirmatively determined
to be special compensation.
   (d) Notwithstanding any other provision of law, payrate and
special compensation schedules, ordinances, or similar documents
shall be public records available for public scrutiny.
   (e) (1) As used in this part, "group or class of employment" means
a number of employees considered together because they share
similarities in job duties, work location, collective bargaining
unit, or other logical work related grouping.  Under no circumstances
shall one employee be considered a group or class.
   (2) Increases in compensation earnable granted to any employee who
is not in a group or class shall be limited during the final
compensation period applicable to the employees, as well as the two
years immediately preceding the final compensation period, to the
average increase in compensation earnable during the same period
reported by the employer for all employees who are in the same
membership classification, except as may otherwise be determined
pursuant to regulations adopted by the board that establish
reasonable standards for granting exceptions.
   (f) As used in this part, "final settlement pay" means any pay or
cash conversions of employee benefits that are in excess of
compensation earnable, that are granted or awarded to a member in
connection with or in anticipation of a separation from employment.
The board shall promulgate regulations that delineate more
specifically what constitutes final settlement pay.
   (g) (1) Notwithstanding subdivision (a), "compensation earnable"
for state members means the average monthly compensation, as
determined by the board, upon the basis of the average time put in by
members in the same group or class of employment and at the same
rate of pay, and is composed of the payrate and special compensation
of the member.  The computation for any absence of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence and that for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in that state service.
   (2) Notwithstanding subdivision (b), "payrate" for state members
means the average monthly remuneration paid in cash out of funds paid
by the employer to similarly situated members of the same group or
class of employment, in payment for the member's services or for time
during which the member is excused from work because of holidays,
sick leave, vacation, compensating time off, or leave of absence.
"Payrate" for state members shall include:
   (A) Any amount deducted from a member's salary for any of the
following:
   (i) Participation in a deferred compensation plan established
pursuant to Chapter 4 (commencing with Section 19993) of Part 2.6.
   (ii) Payment for participation in a retirement plan that meets the
requirements of Section 401(k) of Title 26 of the United States
Code.
   (iii) Payment into a money purchase pension plan and trust that
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
   (iv) Participation in a flexible benefits program.
   (B) Any payment in cash by the member's employer to one other than
an employee for the purpose of purchasing an annuity contract for a
member under an annuity plan that meets the requirements of Section
403(b) of Title 26 of the United States Code.
            (C) Employer "pick up" of member contributions that meets
the requirements of Section 414(h)(2) of Title 26 of the United
States Code.
   (D) Any disability or workers' compensation payments to safety
members in accordance with Section 4800 of the Labor Code.
   (E) Temporary industrial disability payments pursuant to Article 4
(commencing with Section 19869) of Chapter 2.5 of Part 2.6.
   (F) Any other payments the board may determine to be within
"payrate."
   (3) Notwithstanding subdivision (c), "special compensation" for
state members shall mean all of the following:
   (A) The monetary value, as determined by the board, of living
quarters, board, lodging, fuel, laundry, and other advantages of any
nature furnished a member by his or her employer in payment for the
member's services.
   (B) Any compensation for performing normally required duties, such
as holiday pay, bonuses (for duties performed on regular work
shift), educational incentive pay, maintenance and noncash payments,
out-of-class pay, marksmanship pay, hazard pay, motorcycle pay,
paramedic pay, emergency medical technician pay, POST certificate
pay, and split shift differential.
   (C) Compensation for uniforms, except as provided in Section
20632.
   (D) Any other payments the board may determine to be within
"special compensation."
   (4) Neither "payrate" nor "special compensation" for state members
shall include any of the following:
   (A) The provision by the state employer of any medical or hospital
service or care plan or insurance plan for its employees (other than
the purchase of annuity contracts as described below in this
subdivision), any contribution by the employer to meet the premium or
charge for that plan, or any payment into a private fund to provide
health and welfare benefits for employees.
   (B) Any payment by the state employer of the employee portion of
taxes imposed by the Federal Insurance Contribution Act.
   (C) Amounts not available for payment of salaries and that are
applied by the employer for the purchase of annuity contracts
including those that meet the requirements of Section 403(b) of Title
26 of the United States Code.
   (D) Any benefits paid pursuant to Article 5 (commencing with
Section 19878) of Chapter 2.5 of Part 2.6.
   (E) Employer payments that are to be credited as employee
contributions for benefits provided by this system, or employer
payments that are to be credited to employee accounts in deferred
compensation plans; provided, that the amounts deducted from a member'
s wages for participation in a deferred compensation plan shall not
be considered to be "employer payments."
   (F) Payments for unused vacation, annual leave, personal leave,
sick leave, or compensating time off, whether paid in lump sum or
otherwise.
   (G) Final settlement pay.
   (H) Payments for overtime, including pay in lieu of vacation or
holiday.
   (I) Compensation for additional services outside regular duties,
such as standby pay, callback pay, court duty, allowance for
automobiles, and bonuses for duties performed after the member's
regular work shift.
   (J) Amounts not available for payment of salaries and which are
applied by the employer for any of the following:
   (i) The purchase of a retirement plan which meets the requirements
of Section 401(k) of Title 26 of the United States Code.
   (ii) Payment into a money purchase pension plan and trust which
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
   (K) Payments made by the employer to or on behalf of its employees
who have elected to be covered by a flexible benefits program, where
those payments reflect amounts that exceed the employee's salary.
   (L) Any other payments the board may determine are not "payrate"
or "special compensation."
   (5) If the provisions of this subdivision, including the board's
determinations pursuant to subparagraph (F) of paragraph (2) and
subparagraph (D) of paragraph (3), are in conflict with the
provisions of a memorandum of understanding reached pursuant to
Section 3517.5 or 3560, the memorandum of understanding shall be
controlling without further legislative action, except that if the
provisions of a memorandum of understanding require the expenditure
of funds, those provisions shall not become effective unless approved
by the Legislature in the annual Budget Act.  No memorandum of
understanding reached pursuant to Section 3517.5 or 3560 may exclude
from the definition of either "payrate" or "special compensation" a
member's base salary payments or payments for time during which the
member is excused from work because of holidays, sick leave,
vacation, compensating time off, or leave of absence.  If any items
of compensation earnable are included by memorandum of understanding
as "payrate" or "special compensation" for retirement purposes for
represented and higher education employees pursuant to this
paragraph, the Department of Personnel Administration or the Trustees
of the California State University shall obtain approval from the
board for that inclusion.
   (6) (A) Subparagraph (B) of paragraph (3) of this subdivision
prescribes that compensation earnable includes any compensation for
performing normally required duties, such as holiday pay, bonuses
(for duties performed on regular work shift), educational incentive
pay, maintenance and noncash payments, out-of-class pay, marksmanship
pay, hazard pay, motorcycle pay, paramedic pay, emergency medical
technician pay, POST certificate pay, and split shift differential;
and includes compensation for uniforms, except as provided in Section
20632; and subparagraph (I) of paragraph (4) excludes from
compensation earnable compensation for additional services outside
regular duties, such as standby pay, callback pay, court duty,
allowance for automobile, and bonuses for duties performed after
regular work shift.
   (B) Notwithstanding subparagraph (A) of this paragraph, the
Department of Personnel Administration shall determine which payments
and allowances that are paid by the state employer shall be
considered compensation for retirement purposes for any employee who
either is excluded from the definition of state employee in Section
3513, or is a nonelected officer or employee of the executive branch
of government who is not a member of the civil service.
   (C) Notwithstanding subparagraph (A) of this paragraph, the
Trustees of the California State University shall determine which
payments and allowances that are paid by the trustees shall be
considered compensation for retirement purposes for any managerial
employee, as defined in Section 3562, or supervisory employee as
defined in Section 3580.3.
  SEC. 7.  Section 22810.5 of the Government Code is amended to read:

   22810.5.  (a) Participation in a low-cost health benefits plan,
developed and authorized by the board specifically as part of a
flexible benefits program, is restricted to active state employees
who are (1) excluded from the definition of state employee in Section
3513; (2) supervisory employees, as defined in Section  3580.3; (3)
employees of the executive branch of government who are not members
of the civil service; and (4) employees of the California State
University System, as defined in Section 3562 and supervisory
employees, as defined  in Section 3580.3.
   (b) If this section is in conflict with a memorandum of
understanding reached pursuant to Section 3517.5 or Chapter 12
(commencing with Section 3560) of Division 4 of Title 1, the
memorandum of understanding is controlling without further
legislative action, except that, if the memorandum of understanding
requires the expenditure of funds, it shall not become effective
unless approved by the Legislature in the annual Budget Act.
